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Gas price hikes force metal processors to the brink

Gas price hikes force metal processors to the brink

Faced with a doubling in natural gas prices this year and a power bill that is also spiralling higher, David Karney is worried not just for the future of his metals treatment business but that entire parts of the manufacturing sector face wipe-out.

Mr Karney, general manager of Ace Metal Treatment Services south-east of Melbourne, said gas and electricity price increases for the energy-intensive sector had to be passed on to customers, who could instead turn to imported products.

The latest prices being offered by Ace's gas supplier, AGL Energy, of around $20 a gigajoule, three times higher than it was paying last year, would cause Ace to "shut the doors", he said. Power costs have meanwhile surged 20-30 per cent after Ace was slugged by a "summer demand incentive charge" by its network provider.